The analysis for the business group by professional services firm PwC said a Brexit would pose a “serious shock” to the UK economy whose knock-on effects could last 15 years.

PwC examined two different exit scenarios, one at the optimistic end and the other less so, though the report said significantly more pessimistic cases could be constructed.

Under both scenarios, UK living standards, GDP output and employment would be “significantly reduced” compared with staying in the EU, with the cost to the British economy of leaving as much as £100 billion by 2020 – the equivalent of around 5 per cent of GDP.

The study found that, even if a free trade agreement was quickly agreed with the EU, the research concluded that GDP would still be three per cent lower by 2020, with unemployment increasing by a similar percentage.

Carolyn Fairbairn, director general of the CBI, said, “This analysis shows very clearly why leaving the European Union would be a real blow for living standards, jobs and growth.

“The savings from reduced EU budget contributions and regulation are greatly outweighed by the negative impact on trade and investment. Even in the best case this would cause a serious shock to the UK economy.

“By 2020, the overall cost to the economy could be as much as £100 billion and 950,000 jobs. Household income in 2020 could be up to £3,700 lower than it would otherwise have been. The economy would slowly recover over time, but never quite tracks back to where it would have been. Leaving the EU would mean a smaller economy in 2030.